The basic difference between macroeconomics and microeconomics is:
a. microeconomics concentrates on individual markets while macroeconomics focuses primarily on international trade.
b. microeconomics concentrates on the behavior of individual consumers while macroeconomics focuses on the behavior of firms.
c. microeconomics concentrates on the behavior of individual consumers and firms while macroeconomics focuses on the performance of the entire economy.
d. microeconomics explores the causes of inflation while macroeconomics focuses on the causes of unemployment.
Question 2Teenagers are usually the demographic group with the highest unemployment rates.
a. True
b. False
Indicate whether the statement is true or false
Question 3Which of the following are likely to be studied in a microeconomics course?
a. choices made by individual consumers
b. the causes of inflation
c. how the economy's total output is measured
d. how an increase in government spending affects the level of unemployment
Question 4Looking at the labor statistics of the United States from 1951 to 2002, we find that the unemployment rate for women is higher than that for men in most years.
a. True
b. False
Indicate whether the statement is true or false
Question 5Economics:
a. is a narrowly focused discipline.
b. is a broad-ranging, problem-solving discipline.
c. concerns itself only with monetary decisions.
d. says very little about everyday life.
Question 6The GDP gap tends to increase when the economy shifts into recession.
a. True
b. False
Indicate whether the statement is true or false
Question 7Understanding economics would be helpful to which of the following individuals?
a. a college student planning her next semester courses
b. a fashion designer selecting fabric for a new spring collection
c. a restaurant owner deciding whether to expand his establishment's hours of operation
d. All of the above
Question 8The natural rate of unemployment is always more than the actual rate of unemployment because it excludes frictional and seasonal unemployment rates.
a. True
b. False
Indicate whether the statement is true or false
Question 9The real core of the economic problem is to:
a. increase the amount of leisure time available to people.
b. guarantee everyone on the planet a minimum level of food, shelter and clean water.
c. allocate limited resources among competing uses.
d. eliminate scarcity.
Question 10Other things equal, as the number of discouraged workers rises in an economy, the gap between potential and actual real GDP will widen.
a. True
b. False
Indicate whether the statement is true or false
Question 11Economics:
a. is a natural science like biology and chemistry.
b. is a science built on survey data and declared preferences (what people say they are going to do) not on revealed preferences (how people actually behave).
c. is a science concerned with reaching generalizations about human behavior, not unlike sociology or psychology.
d. is concerned with predicting business conditions in the future, not with the current state of the stock market.
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